According to the most recent statistics released from rental research agency, Tenant Profile Network (TPN), 1 out of 5 tenants paying rent of R12 000 per month and more did not make their rental payments in the fourth quarter of 2009. This is almost double the reported figure in the third quarter of last year.
Luke Hirst, MD of Debt experts DebtBusters, says "It is evident that consumers are still struggling enormously regardless of the fact that interest rates have been cut by 5% from its last peak. Over indebtedness and the inability to meet obligations is not confined to the less fortunate.
"According to the data released, a total of 82 percent of all tenants in the R3 000 to R7 000 per month bracket and 79 percent in the R7 000 to R12 000 month rental bracket, all made their rental payments, which shows that the current economic climate and over-indebtedness is hitting the upper income brackets hardest.
Need debt counselling or consolidation?
Explore DebtBusters' solutions for reducing your interest rates and unlocking cash.
Find out more"This is in line with our view that it is the middle to upper income brackets that over extended themselves in the boom years and are now paying the price."
While the country is officially out of recession, the situation for the average South African consumer does not seem to be looking up. With 870 000 job losses in 2009 and thousands more taking salary cuts, the capability to pay rent and meet other obligations is not promising.
Hirst continues, "Consumers need to cut their losses while they can and not bury their heads in the sand. Lifestyle adjustments are essential and this includes budgeting at all times and making certain sacrifices, which may include moving to less expensive rentals."
